Sales of 2005 Bordeaux Are Sluggish
High prices and weak dollar have U.S. consumers overlooking top growths
American wine drinkers are balking at the high prices for 2005 Bordeaux futures, despite the potentially classic quality. More than a month after the first '05 futures went on sale, retailers across the country report that consumers are buying them, but not in large amounts. The '05 futures were offered at the highest levels in history, with the retail price drawn from a basket of leading estates averaging $545 a bottle.
"I think greed was a factor," said Steve Wallace of Los Angeles retailer Wally's. "Yes, they're selling, but not as well as they should."
Futures are consumers' first chance to buy the latest Bordeaux. Starting in late spring, interested buyers can put down money on the previous year's vintage. They receive the wine once it's released, usually in 18 to 24 months. Producers like the system because they can sell a portion of their wine while it's still in the cellar. Consumers like it because they can grab some popular bottles in advance, often at a lower price. Of course, that doesn't always happen--sometimes the wine is the same price when it arrives in stores, or worse, cheaper.
That's less likely with the 2005s. When Wine Spectator's European bureau chief, James Suckling, tasted barrel samples of the wines in March, he gave the vintage a potential overall rating of 95 to 100 points for both the Left Bank and Right Bank--the wines were consistently excellent. Wines from the region haven't scored so well overall since 2000.
So no one was surprised when the châteaus released their first tranche of futures in June and raised their prices higher than the disappointing 2004 vintage and even the outstanding 2003 vintage. But the increases are staggering. The 2005 Château Cheval-Blanc futures are selling for 110 percent higher than they did in 2003. Chateau Pâlmer's 2005 price is 89 percent higher than it was in 2003. You could buy a bottle of Château Haut-Brion 1982 for an average auction price of $423, according to the Wine Spectator Auction Index, and drink it tonight, or buy Haut-Brion 2005 futures at $571 per bottle when it probably won't be ready to drink until at least 2015.
"You have to buy 1961 wines to find Bordeaux more expensive than this," said John Kapon, president and auction director of New York retailer Acker, Merrall and Condit.
Leading retailers are offering futures from as many châteaus as they did for 2000 and 2003, but aren't offering as much wine. "It was surreal knowing how good the wine was and saying, 'No,'" said Chris Adams, executive vice president at New York's Sherry-Lehmann.
Mark Wessels, managing director at MacArthurs in Washington, D.C. said, "I haven't gone back and chased at the second tranche like I did in 2000. The first scared me enough."
Several retailers report that longtime customers are buying from lesser châteaus whose wines are retailing for less than $100 a bottle. The first-growth futures are selling, but to new customers, often buying online. Some retailers think these are consumers who see the futures as an investment opportunity, hoping to sell the wine down the road for a profit.
The second-growths are taking the biggest hit, passed up by both wine lovers and investors. "Palmer was the biggest bust," said Kapon. Two major retailers claimed they had added only half their usual markups when pricing the wines. "It's hard to push Cos-d'Estournel at $190 a bottle," said another major retailer.
The Bordelais don't seem to be sweating, however. While the weak dollar has automatically raised U.S. prices for the 2005 futures by 50 percent, the wines are reportedly selling well in Asia, Switzerland and the United Kingdom. So with a vintage like 2005 and increasing interest worldwide, château owners were able to raise their prices even if it hurt American sales.
"For retailers, it's a double or a triple, when it should have been a grand slam," said Christian Navarro, the main buyer at Wally's. "If they had been a little more cautious with their pricing, it would have been a grand slam for everyone--the consumer, the retailer, the négociant and the producer."
Bordeaux Prices, Per Bottle
| Château |
2000 |
2003 |
2005 |
| Ausone |
$650 |
$750 |
$1,375 |
| Cheval-Blanc |
$650 |
$350 |
$737 |
| Cos-d'Estournel |
$95 |
$150 |
$197 |
| Haut-Brion |
$425 |
$325 |
$571 |
| Lafite Rothschild |
$400 |
$450 |
$622 |
| Latour |
$475 |
$550 |
$766 |
| Léoville Las Cases |
$170 |
$215 |
$280 |
| Margaux |
$423 |
$425 |
$728 |
| Mouton-Rothschild |
$395 |
$325 |
$573 |
| Palmer |
$120 |
$130 |
$246 |
| Pavie |
$205 |
$230 |
$321 |
| Pichon-Longueville-Lalande |
$130 |
$125 |
$127 |
| Average Bottle Price |
$345 |
$335 |
$545 |
The 2000 and 2003 vintages are release prices from the Wine Spectator
database. The 2005 prices are an average of futures prices from several top
U.S. retailers.
